A rule allowing lenders transferring mortgages to condense disclosure statements to one sentence will take effect June 19.
The Housing and Urban Development Department on Dec. 19 finalized the rule, which governs disclosures for the transfer of mortgage servicing under the Real Estate Settlement Procedures Act.
This new rule replaces an interim regulation that has been in effect since 1991.
When disclosing mortgage servicing history to a borrower, lenders will merely need to state: "The person making the loan has previously assigned, sold, or transferred the servicing of federally related mortgage loans."
The Riegle Community Development and Regulatory Improvement Act, passed last year, mandated that the agency change the disclosure requirement.
Although second liens are covered by Respa, all federally related mortgage loans that are not secured by a first lien are exempted from this rule.